Rapyd Financial Network to Raise $300 Million in Funding Round

Valuation Decreases to $3.5 Billion

Rapyd Financial Network is seeking to raise $300 million in a new funding round, which would value the global payments platform at $3.5 billion. This represents a significant decrease from its previously estimated valuation of approximately $9 billion set in 2021, according to Bloomberg.

Overview of Rapyd’s Services

The London-based company offers a range of financial services, including payments, mobile wallets, money transfers, card issuing, and fraud protection. These services are accessible to third parties via an API, providing a comprehensive platform for fintech companies.

Plans for Funding

Rapyd plans to use the funding to acquire a payment processing startup. The company has been on an acquisition streak, recently adding four companies, including Iceland-based payments startup Valitor for $100 million in 2022. It also paid $610 million for units of the global payments platform PayU in 2023.

Recent Financing Round

In 2023, Rapyd CEO and co-founder Arik Shtilman told TechCrunch that the company was "in the final stages of closing a new financing round of $700 million." However, the company did not publicly report the financing round, making it unclear whether that funding was secured and, if so, at what valuation.

Comparison to Competitor Stripe

That year, Rapyd’s competitor, the payments giant Stripe, was forced to raise capital at a $50 billion valuation, down from its peak price of $95 billion. This highlights the current market trends, where valuations are decreasing, and startups are facing challenges in securing funding at high valuations.

Down Rounds in the Fintech Industry

Should Rapyd complete this raise at a lower valuation from its peak, it would have plenty of company. Many startups have raised capital at lower valuations than their previous financings, known as a down round. This trend is a result of the excessive valuations during the VC funding frenzy of 2020 and 2021.

Market Trends and Valuation

This is because valuations were excessively high during the VC funding frenzy of 2020 and 2021. Flat or down rounds hit a decade high, making up 27% of all deals in the first nine months of 2024, according to PitchBook data.

Backers and Response

The company’s backers include Coatue, Oak HC/FT, Target Global, and Tiger Global Management. Rapyd did not immediately respond to a request for comment.